Tuesday, September 25, 2012

Blackmail is such an ugly word

The Greek media has recently been full of stories concerning a mysterious list of 30 politicians who are suspected of having income far in excess of that declared. Newspapers and TV channels have devoted endless hours and column inches to the subject even suggesting the names of those possibly on the list and what there presence means for Greece's embattled party political system.

However, behind the furore created its seems that other battles are being fought. Athens has been in tough negotiations with its creditors over the terms of the next installment of "bailout" cash and part of the agreement includes unpopular cuts in public spending and yet more tax hikes. While the Greek government has made it known that it is holding out for better terms the reality is that they have little room for manoeuver and no leverage. At some point they will have to acknlowlege this and send the appropriate measures to be approved in parliamwent. And then the real battle will begin.

The current three party coalition consisting of the nominally conservative New Democracy party and the nominally socialist PASOK and Democratic Left parties have little in common other than a desire for Greece to stay within the eurozone. Their stint in power has proved disasterous in terms of popular support if opionon polls are to be believed and they are faced with with backbench rebellion. Even the right wing New Democracy has problem not only with its fiscal policies but also the fact that its leader, Antonis Samaras badly fractured the party during his successful leadership bid.

Faced with the prospect of shaky support in parliament for any more austerity legislation the party whips are perhaps searching for new ways of ensuring backbench discipline. In the past this was achieved by by threats of de-selection but with PASOK in terminal decline and the other parties support fading away such moves have less appeal. Many MPs already know that they face little chance of re-election if the political climate remains the same and that yet more taxes and cuts will condemn to oblivion at the polls.

The other threat used extensively after the last austerity legislation vote in 2011 was expulsion from the party, with both PASOK and New Democracy using this blunt instrument to deal with recalcitrant MPs. However, such a move proved to be politically expensive as many MPs either formed new parties or defected to other existing ones. A move that cost the PASOK - New Democracy coalition votes in the 2012 elections.

So what to do next? With more traditional methods of maintaining the party whip exhausted the threat of investigation by the tax authorities for undeclared income might prove more effective. The fact that the names have not been revealed just adds to the uncertainty and could be used to nip any revolt in the bud with just the hint that names will be leaked to the press.

After decades of financial scandals involving both New Democracy and PASOK members, even in the highest circles of government the number of those in parliament with economic skeletons in their cupboards will surely include more than the 30 indivividuals being investigated by the authorities. The beauty of endemic political corruption is that not only does it reward loyal supporters, it can also be used to rein in challenges to the status quo. All it takes is a word to friendly journalists and a high profile trial to thwart rivals.